The main legal principle established in the judgment is the interpretation and application of the Registration Act 1908 and the Transfer of Property Act to determine the validity and effectiveness of charges and mortgages over immovable property, specifically in the context of loans and security rights between financial institutions.

JUDGMENT

Rankin, C.J. - The Imperial Bank of India appeals from an order dated 26th August 1929 made by my learned brother Buckland, J., upon an application for directions made by the liquidators in the winding up of the Bengal National Bank Ltd. In May 1923 the Imperial Bank advanced to the Bengal National Bank Rs. 10,00,001) upon the security of a debenture dated 4th May 1923 which purported to charge, the whole undertaking, proper ties, assets and interests, present and future, including the 'uncalled capital, of the borrowing bank for the repayment of the loan with interest. In July of the same year, the Imperial Bank made a further loan of Rs. 10,00,000 upon the security of a debenture dated 4th August 1923 which also created a charge upon the whole of the undertaking, properties, assets and interests, present an 1 future, including the uncalled capital of the borrowing bank. These debentures were duly registered under the Companies Act with the Registrar of Joint Stock Companies, but neither debenture was registered under the Registration Act of 1908 and it is this circumstance which gives rise to question in the present case. On 28th April 1927 the Bengal National Bank suspended payment and the Imperial Bank appointed receivers on that date. A debenture-holder's suit was instituted on 26th May 1927. On 1st June 1927 the Court appointed certain persons to be receivers in the debenture-holder's suit. On 2nd August of that year, a compulsory winding up order was made against the Bengal National Bank; the liquidators, with the exception of a Mr. Carter, are also the receivers by the Court for the debenture-holders.

2. The present appeal arises out of an application by the liquidators for directions and the sole question before us has reference to the respective rights of the Imperial Bank and the Bengal National Bank Limited (in liquidation) as regards eases in which the latter had given loans or overdrafts upon the security of title-deeds deposited with it. The question is whether the security held by the Imperial Bank extends to, and is effective over, the debts due to the Bengal National Bank from customers who had in this way obtained advances upon security, and whether the Imperial Bank is entitled to the benefit of the security as part of the property charged by the debentures, in cases where possession of the title-deeds was never given to the Imperial Bank. It appears that in some cases title-deeds which formed security for overdrafts had been sub-mortgaged with the Imperial Bank by being deposited with it by the Bengal National Bank but these cases are excluded from the question which was raised before us upon this appeal.

3. The learned Judge took the view that whether or not the security held by the Imperial Bank is valid and effective as regards the debts, it is not valid and effective as regards any title-deeds originally deposited as security with the Bengal National Bank in cases in which possession of the title-deeds was never given to the Imperial Bank.

4. Mr. Page for the Imperial Bank contended that it is against all principle to hold that the Imperial Bank has a right under its charge to the debts and yet has no right to the security given therefor. Mr. Ameer Ali, on behalf of the liquidators, did not contest that this position was difficult to maintain but contended that the question to be answered first is whether in the circumstances these secured debts are available as all to the Imperial Bank under their charge.

5. On this the argument for the liquidators is rested upon Section 17, Registration Act of 1908:

The, following shall be registered, if the property to which they relate is situate in the district in which, and if they have been executed on or after the date on which, Act 16 of 1864, or the Registration Act 20 of 1866, or Registration Act 8 of 1871, or the Registration Act 3 of 1877 or this Act came into force namely:

(a) Instruments of gift of immovable property;

(b) Other non-testamentary instrume